The One-Day Business Plan

by Greg Ubert – Crimson Cup Coffee

Putting off writ­ing your busi­ness plan just delays the day you can open your own cof­fee busi­ness. If you’ve done your home­work and fol­low some basic guide­lines, writ­ing a busi­ness plan is not that dif­fi­cult. In fact, you can put together a rough draft in a sin­gle day.  Here’s how!

Get Organized. Before you sit down to write your busi­ness plan, you need to assem­ble back­ground infor­ma­tion about your busi­ness, start­ing with the loca­tion and terms of your lease.

You’ll also need to gather infor­ma­tion about the cof­fee indus­try, includ­ing details about con­sumers, con­sump­tion pat­terns and indus­try trends. Much of this is avail­able from indus­try groups such as the Specialty Coffee Association of America and from peri­od­i­cals such as CoffeeTalk.

After you spend a cou­ple of hours col­lect­ing and orga­niz­ing this infor­ma­tion, you’re ready to get started writ­ing the plan.  Your plan should con­sist of six sec­tions, as described below.

Executive Summary. The first sec­tion should be the last page that you write. It high­lights and con­denses the key points from each sec­tion of the plan into a few sen­tences that tell the story of your busi­ness. Next to the finan­cial data, this is the most impor­tant part of your busi­ness plan. Most bankers tell me they review the exec­u­tive sum­mary, and then turn to the finan­cials if they are interested.

Business Description. Keep the busi­ness descrip­tion brief. In this sec­tion, you need to supply:

  • The name of the business
  • Its loca­tion
  • A list of items to be sold
  • Pictures of the business
  • A floor plan
  • Leasing arrange­ments
  • Architect/contractor esti­mates
  • The name of the law firm you are using to review your lease and other contracts.

Management Profile. If you are the pri­mary man­ager, include a sum­mary of your resume. If you plan to hire man­agers or have a part­ner, you should include their edu­ca­tion, employ­ment record, skills, and accom­plish­ments. You should also include details about the cof­fee busi­ness con­sul­tants who will be assist­ing with over­all busi­ness strat­egy and staff train­ing. Investors will have added con­fi­dence in your abil­ity to suc­ceed if you work with advi­sors with a proven track record.

A Statement about the Coffee Industry. Include infor­ma­tion about:

  • Major com­peti­tors
  • Industry trends
  • Customer demo­graph­ics
  • Sales sen­si­tiv­ity to eco­nomic cycles
  • What makes you bet­ter (sets you apart from others)
  • Key finan­cial mea­sures in the indus­try (profit margin).

Marketing Plan. Your mar­ket­ing plan outlines:

  • The loca­tion of your business
  • The prod­ucts you plan to sell (includ­ing a copy of your menu)
  • A descrip­tion of your tar­geted customers
  • Why cus­tomers will buy from you
  • How you will attract poten­tial customers

Financial Data. The finan­cial sec­tion of your busi­ness plan requires three doc­u­ments: a cash flow state­ment, an income state­ment (also known as a profit & loss state­ment or P&L) and a bal­ance sheet.

Cash Flow Statement. The cash flow state­ment helps to deter­mine the short-term via­bil­ity of a com­pany, par­tic­u­larly its abil­ity to pay bills. This doc­u­ment outlines:

  • Your ini­tial invest­ment (begin­ning cash)
  • The level of sales needed to break even (as dis­cussed in last month’s CoffeeTalk)
  • What expenses to expect, and
  • How much money (if any) will be needed from out­side sources

The cash flow state­ment also reflects invest­ments in your busi­ness. Ending cash is the money in the bank at the end of the month after expenses have been paid.

The Income Statement/Profit & Loss Statement (P&L). In sim­plest terms, it rep­re­sents Total Sales for the year – Expenses for the year. Most of the infor­ma­tion needed to pop­u­late the income state­ment comes from the Cash Flow state­ment (sales, COGS, expenses). The only fig­ures that you may need to obtain from an accoun­tant are depre­ci­a­tion and taxes.

The Balance Sheet. This is the piece to the finan­cial puz­zle. It deter­mines how much you’re worth! This is cal­cu­lated with a basic for­mula: Total Assets (what you own) – Liabilities (what you owe) = Net Worth. Once you’ve com­pleted the cash flow and income state­ments, the bal­ance sheet mainly requires fill­ing in the blanks. Total Assets con­sist of Assets (Cash and Inventory) plus Fixed Assets (Equipment minus Depreciation).  Liabilities con­sist of Accounts Payable and Long-term Debt.

By the end of the day, you should have a solid draft of your busi­ness plan. Over the next week or so, pol­ish your draft and fill in any miss­ing infor­ma­tion. You’ll then want to share your plan with cof­fee busi­ness con­sul­tants and other advi­sors to get feed­back and fur­ther refine the plan.

Greg Ubert, founder and pres­i­dent of Crimson Cup Coffee & Tea, has been roast­ing cof­fee in small batches since 1991 and has taught hun­dreds of busi­ness own­ers how to run suc­cess­ful inde­pen­dent cof­fee houses. The author of Seven Steps to Success in the Specialty Coffee Industry can be reached at

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